For the first time, an Australian court has imposed jail sentences on members of a cartel that engaged in price fixing, a form of cartel conduct. Cartel conduct is strictly illegal under Australian competition law, as it is in New Zealand under the Commerce Act 1986. In 2009, Australia criminalised cartel conduct, with New Zealand doing the same last year.
The case concerned a money transfer business and two of its competitors, all operating in Sydney and Melbourne. A joint investigation by the Australian Competition and Consumer Commission and the Australian Federal Police found they engaged in fixing the Australian dollar/Vietnamese dong exchange rate and fees that they charged to customers. The company was found to have given effect to a cartel in relation to exchange rates and fees for money transfer to Vietnam. Four individuals were found to have been knowingly concerned with some or all of the conduct. The Australian court fined the money transfer business A$1m, and imposed jail sentences on the four individuals (with the highest total sentence being two and a half years), although they were immediately released by the judge on good behaviour bonds.
Follow the leader?
In April 2021, it became a criminal offence to enter into a cartel arrangement under New Zealand law. Operating in parallel to the civil regime, criminal sanctions are now available for certain breaches of section 30 of the Commerce Act. Individuals are liable on conviction for imprisonment of up to seven years, a fine not exceeding $500,000, or both. Companies are liable on conviction for a fine up to the same level as the current civil penalties (ie the greater of $10m, three times the value of the commercial gain resulting from the cartel, or 10% of turnover).
The latest judgment from Australia is a good reminder for businesses to review their competition law compliance and undertake compliance training for staff. Our previous update sets out further recommendations for managing and minimising your risk.
It is also a good reminder that, where Australian competition laws and jurisprudence go, we tend to follow: we have followed in criminalising cartel conduct, and we have no doubt that our regulator (the Commerce Commission) would relish the opportunity to seek jail time for cartel conduct, if – or when – it arises.
Potential cartelists should consider themselves on notice of the serious risks under New Zealand competition laws.
This article was co-written by Susie Kilty (partner), Tony Dellow (partner), Anna Parker (senior associate), Laura Green (senior solicitor) and Emily Tyler (solicitor).